Yahoo shares soar on new Microsoft takeover hopes

Yahoo's (YHOO) stock price soared more than 10 percent Wednesday on hopes that its once-spurned suitor, Microsoft, will return with another takeover bid now that the struggling Internet company is mulling a possible sale.

Reuters reported late in the day that Microsoft is considering whether to make an offer, and that fed the takeover speculation that has swirled around Yahoo since it fired Carol Bartz as CEO five weeks ago.

The story cited unnamed sources that Reuters said included a high-ranking Microsoft executive saying there's disagreement within Microsoft on whether it makes sense to pursue Yahoo again more than three years after being rebuffed.

A Microsoft spokesman declined to comment.

Yahoo's shares reached $16.15, their highest point since Bartz's Sept. 6 ouster, before retreating to close at $15.92, an increase for the day of $1.46, or 10.1 percent. They fell 46 cents after hours.

Microsoft is widely viewed among investors as the most tantalizing candidate to buy Yahoo because the world's largest software maker has the cash to pull it off, and a history with its rival that makes a takeover seem like a realistic scenario.

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But making a case for Microsoft to buy Yahoo still requires wishful thinking. Yahoo and Microsoft are now bound together in an Internet search partnership that gives Microsoft less incentive to buy Yahoo outright. Microsoft is also facing a challenge with personal computer sales slowing that could make the headaches that would accompany a Yahoo acquisition even less attractive.

Yahoo still holds some allure because its brand remains among the best-known on the Internet. Its website attracts a worldwide audience of nearly 800 million, although its users are sticking around for shorter periods of time and hanging out more frequently on Facebook.

Bartz bluntly said not long after Yahoo hired her in 2009 that the company probably should have accepted Microsoft's original takeover offer. Most analysts believe Yahoo would jump at the chance to sell to Microsoft now, given that its revenue has been declining instead of growing as the board had promised. Any buyer probably would be able to pay much less than Microsoft once offered.